IBM to pay $17 million as settlement linked to anti-DEI probe — What was the tech major accused of?
IBM has agreed to pay $17 million with the U.S. government to resolve a federal investigation into the firm’s diversity, equity and inclusion (DEI) practices, the Justice Department said Friday.
The deal comes as the first decision by the U.S. Department of Justice’s “Civil Rights Fraud Initiative,” a unit created last year to use civil anti-fraud law to crack down on DEI policies.
“International Business Machines Corporation (IBM) has agreed to pay the United States $17,077,043, including civil penalties, to resolve allegations that it violated the False Claims Act by failing to comply with anti-discrimination requirements in its federal contracts for practices that the United States alleged discriminated against employees and applicants for employment because of race, color, national origin, or sex,” the Justice Department said in a press release. he said.
What were the accusations against IBM?
The Justice Department had alleged that IBM “knowingly” made “false allegations” about recruiting and employment practices in its federal contracts, according to the settlement.
U.S. law requires companies to be fair and document that they will not discriminate against an employee or job applicant because of race, color, national origin, or sex. They must also document that they will take steps to ensure that applicants are hired and that employees are treated without bias during employment.
Trump has targeted public and private organizations, from government agencies to private universities, over DEI practices that civil rights advocates say help address historic inequities for marginalized groups like women and ethnic minorities.
“The agreement resolves allegations that IBM failed to comply with these requirements and knowingly engaged in what the United States alleges were discriminatory employment practices,” the press release said.
In the settlement signed by the New York-based tech company and the Department of Justice, the US government alleged that IBM’s practices included using a “diversity modifier” that “ties bonus compensation to achieving demographic targets,” among other allegations.
It also alleged that IBM offered certain training, partnerships, mentoring, leadership development programs, and training opportunities only to certain employees and that eligibility, participation, access, or entry was limited based on race or gender.
What led to the agreement?
Although IBM will pay a $17 million fine for allegedly violating U.S. law, the government also acknowledged that the tech company had taken significant steps to cooperate with the investigation.
IBM released the facts about the government’s investigation early. The Company has also taken voluntary remedial measures, including discontinuing and/or replacing various such programs and practices.
The settlement also stated that IBM discontinued or changed various programs and policies, but the company denied any illegal conduct.
“This agreement neither constitutes an admission of liability on the part of IBM nor a concession by the United States that its claims are not well-founded,” the agreement said.
The White House characterizes DEI as anti-meritocratic and discriminatory against groups such as white people and men. Trump signed executive orders asking federal contractors and subcontractors to eliminate DEI.
The matter was handled by the Civil Division, Commercial Litigation Branch, Fraud Section of the Ministry of Justice.
